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1 25: The Arcot Machinery Company has been offered a contract to build and deliver mine extruding presses to the Home Bottling Company. The contract price negotiated is contingent upon meeting a specified delivery time, with a bonus offered for early delivery. The marketing department has established the following cost and time information: uncertante existe Kerti hai 3 Normal e Normal Crash Crash Cost Indicalm Weeks Time Activity A: to V B : tp Mitm () (Weeks) () B425 201503 -30 5000 a h 9000 724 80000193914000 40002 6000 New Cost 2-5 au cow 5000 16000 3-6 4-6 3000 2000 10000 7000 w in a 5000 136003 14000 10600 5-7 6-7 Advanced Malld Idyllell ALLUumny: Theory and Practices 38 Normal delivery time is 16 weeks for a contract price of 62,000. On the basis of the calculated profitability for each delivery time specified in the following table, what delivery schedule do you recommend that the company may implement? 13 Contract Delivery Time (Weeks) Contract Amount) 62,500 65,000 70,000 72,500 (Here A = t:optimistic time, B = to: pessimistic time, M=m; Most Likely time.) Answer: Last crashing - 18.700. It can be seen that the profit is maximum when the project duration is 13 weeks. Hence the company should implement the delivery schedule of 13 weeks at a contract amount of 70,000 to gain maximum profit of 21,000. ning